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BREAKING NEWS FROM CNBC'S KATE KELLY ON THE BP CAPITAL RAISE DISCUSSIONS

WHEN: Today, Friday, June 18th at 12:00PM ET

WHERE: CNBC's "The Strategy Session"

Following is the unofficial transcript. All references must be sourced to CNBC.

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DAVID FABER: WE CAN'T STAY AWAY FROM BP FOR TOO LONG, AND, IN FACT, WE DON'T LIKE TO STAY AWAY FROM KATE KELLY. SHE BROKE THE NEWS YESTERDAY THAT BP WAS CLOSE TO FLOATING A CORPORATE BOND OFFERING THAT COULD APPROACH $10 BILLION. SHE'S BEEN WORKING ON THAT STORY AND HAS MORE BREAKING NEWS INVOLVING BP'S EFFORTS TO HIT THE FINANCING MARKETS.

KATE KELLY: DAVID, THEY'RE STILL TALKING ABOUT A COUPLE OF THINGS, INCLUDING, OF COURSE, THIS BOND OFFERING WHICH COULD COME AS EARLY AS NEXT WEEK. A COUPLE THINGS TO THINK ABOUT THERE. THEY WOULD LOVE TO RAISE $10 BILLION IF THEY COULD. APPARENTLY, THE BANKERS ARE SAYING, LOOK, MORE REALISTIC MIGHT BE $4 BILLION TO $5 BILLION.LET'S DO THIS OFFERING IN A POSITIVE WAY THAT'S VERY SOLID, THAT WILL REASSURE THE MARKETS. IT WILL REINSTILL CONFIDENCE. THAT IS THE MAIN GOAL HERE. THEY WOULD RATHER DO THAT WITH A SMALLER DEAL THAN DO A $10 BILLION DEAL AND HAVE SENTIMENT REFLECT THE CHOPPINESS. THAT'S ONE THING. THE OTHER THING THAT THEY'RE TALKING TO FOLKS ABOUT IS THE POSSIBILITY OF A BANK LOAN IN THIS SAME NEIGHBORHOOD OF AN AMOUNT, $4 BILLION TO $5 BILLION. IT WOULD BE A GROUP OF BANKS, PROBABLY SOME UNDERWRITERS. AS WE MENTIONED YESTERDAY, THE UNDERWRITERS ARE UBS, CREDIT SUISSE, GOLDMAN SACHS, MORGAN STANLEY AND BLACKSTONE. SO YOU CAN EXPECT TO SEE SOME OF THOSE NAMES. PEOPLE MAY GIVE IN VARYING AMOUNTS. I SAY GIVE. LOAN. AND THE IDEA BEHIND THAT WOULD BE TO CREATE A LITTLE EXTRA DRY POWDER, BUT, AGAIN, TO RESTORE CONFIDENCE.

FABER: WHICH IS IT? IS IT CONFIDENCE, OR DO THEY NEED THE MONEY? BECAUSE FRANKLY, THEY'RE TWO DIFFERENT THINGS HERE. I MEAN, IF THEY REALLY NEED THE MONEY, THAT'S NOT NECESSARILY A GOOD THING. YET, IF THEY ARE SUCCESSFUL IN SIMPLY GIVING MORE CONFIDENCE TOTHE MARKET BY RAISING THE MONEY,THAT IS A GOOD THING.

KELLY: WELL, LOOK, DAVID, THIS COMPANY IS STILL AWASH IN CASH. AS WE SEE FROM THE RAYMOND JAMES ANALYST YESTERDAY WHO SAID THEIR LIABILITIES COULD BE $63 BILLION BEFORE THE $20 BILLION ESCROW ACCOUNT, THE COST OF THE SPILL AND THE LIABILITIES ARE VERY, VERY HARD TO VALUE RIGHT NOW. THEY APPEAR TO BE CLIMBING. MY UNDERSTANDING IS THE COMPANY WANTS TO HAVE MORE DRY POWDER TOWORK WITH, BUT, OF COURSE, THEY ALSO WANT TO REASSURE INVESTORS,AND IF THEY COULD PULL OFF A DECENT SIZE OFFERING AND CREATE SOME POSITIVE SENTIMENTALITY, THAT'S A WIN.

GARY KAMINSKY: WHAT I THINKS GOING TO HAPPEN THIS WEEKEND IS GOING TO COME DOWN TO WHAT TYPE OF YIELD DO THEY WANT TO GIVE AWAY. THEY'RE COURSE OF CAPITAL TO MAKE THIS BOND YIELD HAPPEN IF IT'S GOING TO HAPPEN. IF THEY -- YOU KNOW, IF THEY'RE GOING TO BE WILLING TO PAY INVESTORS, YOU KNOW -- WE HEARD IT YESTERDAY FROM FED RATED. IF THEY'RE GOING TO BE ABLE TO GIVE A COUPON THAT'S ATTRACTIVE ENOUGH, I THINK THEY CAN RAISE MORE THAN $4 BILLION TO $5 BILLION. IT'S A FACT OF WHAT DO THEY WANTTO PAY TO ATTRACT THE BUYERS.

FABER: IT ALWAYS IS, I WOULD THINK. AT THE END OF THE DAY.

KAMINSKY: THE COUPON ON THIS OFFERING, IF IT COMES THIS WAY, IS GOING TO BE THE GO, NO GO CRITERIA THAT PEOPLE WILL LOOK AT. THEY KNOW THE BP SITUATION IS KIND OF STICKY. IT'S GOING TO BE WHAT ARE YOU WILLING TO PAY ME IF I'M WILLING TO CREDIT YOU SOME MONEY?

KELLY: HERE'S AN INTERESTING POINT. DESPITE THE CONTINUED UNCERTAINTIES, BP IS STILL IN A POSITION OF QUITE A GOOD DEAL OF LEVERAGE. THEY FOR EXAMPLE HAVE TOLD BANKERS YOU KNOW WE'RE PROBABLY NOT GOING TO SECURITIZE THESE LOANS WITH OUTSIDE OF US OIL RESERVES WHICH IS SOMETHING THE BANKS WANTED.FOR EXAMPLE, THEY'RE NOT GOING TO GUARANTEE THAT IF THE BANKS LOAN THEM MONEY, THEY WILL GO TO THE MARKET WITH A DEBT OFFERING IN JULY IS MY UNDERSTANDING, EVEN THOUGH THE BANKERS MIGHT LIKE TO SEE THAT. THEY MIGHT LIKE A FIRMER TIMELINE. DISCUSSIONS ARE STILL FLUID. BUT IT SEEMS THAT BP IS IT STILL HOLDING A GOOD HAND OF CARDS IN MANY WAYS.

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